It's funny how people take everything I say at face-value.
Competitive AI is maybe not the hardest thing to do with the right processing power (though if the AI is too good, you start loosing and thus negate the whole point of having a fun game), but implementing creative and unpredictable AI that can emulate human behaviour, linked with a procedural animation and voice system would be one terrifying leap forward. But useful AI is a very hard field, so we're gonna continue to play with our dumb XBL buddies for the foreseeable future. I hope I could put some fears to rest.